Spain's Sabadell examines listing of hotel business -sources

Reuters Staff

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MADRID, May 25 (Reuters) - Spain’s Banco Sabadell is considering listing its hotel investment company as part of its efforts to offload property assets, two sources with knowledge of the matter said on Thursday.

Spanish banks are working on reducing property assets following the country’s real estate bust in 2007 in an effort to preserve capital and restore their profitability.

Sabadell holds a 99 percent stake in HI Partners, which manages 31 hotels in Spain as well as 800 million euros ($897 million) of hotel loans. It has given several investment banks a mandate to explore floating the business, the sources said, confirming earlier reports in Expansion and El Confidencial.

Citi, Credit Suisse and Morgan Stanley are among those mandated, one of the sources said, adding that the flotation could take place as soon as the third quarter of this year.

“The plan is still under discussion and at an early stage and no final decision has been reached yet,” the source said, adding that a board meeting in July could sign off on the plan.

The three investment banks declined to comment.

Sabadell, which currently makes around a quarter of its profit in Britain following its acquisition of TSB in 2015, also declined to comment.

In the last year, Sabadell reduced its problematic assets by 2.75 billion euros to 18 billion euros as end-March.

The source said no decision had been taken on the size of the disposal of the hotel business but added that the bank would probably remain a big shareholder in order to benefit from an incipient real estate recovery in Spain.

The Spanish economy is also benefiting from a tourism boom which is expected to help its economy expand at an even quicker pace in the second quarter, after it picked up steam in the first three months of the year. ($1 = 0.8915 euros) (Reporting by Jesús Aguado and Andres Gonzalez; editing by Sarah White and Alexander Smith)